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1 Oct 2013
Flash: USD and Government Shutdown – TD Securities
FXstreet.com (London) - Research teams at TD Securities explained the US government began a partial shutdown (the 18th since the 1970s) after Congress failed to reach a deal on spending last night.
Key quotes:
“The shutdown has pressured the USD modestly but equity markets in Europe and US futures are pushing higher”.
"The USD more or less ignored the last partial US government shutdowns seen in 1995/1996".
"Investors generally seem to feel that any shutdown is unlikely to last and so US economic damage will be limited (ballpark estimates suggest the shutdown will cost 0.1-0.2% pp off of GDP per week). But the longer the shutdown, the greater the overall damage".
"Regional US manufacturing surveys yesterday came in broadly above expectations, setting the scene for a decent manufacturing PMI report this morning".
"US employment data Friday may be a victim of the shutdown".
Key quotes:
“The shutdown has pressured the USD modestly but equity markets in Europe and US futures are pushing higher”.
"The USD more or less ignored the last partial US government shutdowns seen in 1995/1996".
"Investors generally seem to feel that any shutdown is unlikely to last and so US economic damage will be limited (ballpark estimates suggest the shutdown will cost 0.1-0.2% pp off of GDP per week). But the longer the shutdown, the greater the overall damage".
"Regional US manufacturing surveys yesterday came in broadly above expectations, setting the scene for a decent manufacturing PMI report this morning".
"US employment data Friday may be a victim of the shutdown".